This has nothing to do with the item squish, the idea of that was so that we don't get numbers running into the thousands on gear or hitting for millions. Too late to be honest.

I personally think capping mana was a bad idea. And what makes you think capping health would sort out pvp? The problem with pvp at the moment isn't varying health pools its to do with the colossal gap between a 2/2 upgraded fully geared person and those who aren't. Then there's class issues (warriors...) but how would capping health solve any of that?

They already kind of but not entirely did what you've suggested anyway, by making stamina scale with ilvl. Back in previous expansions you could differentiate what was strangely itemized tank gear and dps gear, by the ratio of stamina to strength (if it wasn't obvious anyway) or other things like inflated armour values. I was under the impression stamina is now relative to ilvl, so outside of passive spells and buffs, if you all had the same ilvl, you'll have similar hp values?

I like how Blizzard gave everyone flat 300k mana at level 90. Why cant they do something similar to health? Seems like it would be a step in the right direction for making spells balanced for pvp.

How exactly would this make spells balanced for pvp? With every new tier of gear we're going to do more and more damage, if health pools don't go up at all by the end of an expansion your health will be dropping too quickly.

For pve, no. Blizzard added the flat mana pools because:
1. mana was very unforgiving for freshly dinged toons and was almost a none issue for fully gear toons.'
2. Intellect was too much of a godmode stat for healers.

First: The fact that mana does not scale with item level has nothing to do with an item level squish, and wasn't done to keep numbers small. It was done to make mana more meaningful for healers, to prevent intellect from double dipping as both a power and a longevity stat, and to make sure that cheap efficient heals remained valuable after the first tier of raiding. I understand that those sorts of effects are in fact what you want here, but that has nothing to do with ilvl.

Second: The Item Level squish wouldn't do anything at all for PvP among equal level characters (and given how powerful max-level characters are against anything lower level, I don't think balance plays any meaningful role in a situation other than equal level characters doing combat.) It would just make numbers smaller. There is no balance difference between me having 100,000 hp, taking 10,000 damage from an attack, and getting healed for 5,000, vs. a scenario where I have 100 hp, take 10 damage from an attack, and get healed for 5. The latter has much smaller numbers, but the net result is the same; it takes 10 hits to kill me from full health, and 20 heals to heal the equivalent of my max health. Unless those latter numbers change (ie unless you change how much percentage of a health bar can be taken off or restored by an attack/heal), the balance isn't adjusted. Thus, an item level crunch/adjustment wouldn't have any effect on balance.

All that said, I still don't think it would be a good idea for health. If health doesn't grow, then as healer's spells grow more powerful they become able to restore larger portions of a player's health at once. Enough power, and the cheap efficient heals become strong enough to get the job on their own, making fights far less dangerous. The only solution to that is to increase the damage done to players... but without increasing health totals, that just takes us back toward where we were at the end of WotLK: spam casting powerful heals because if you stop for even a moment, someone dies. Increasing damage and increasing healing strength without increasing health totals leads to larger and larger burst on both ends of the scale... which gets out of wack fast.

That is, in fact, why health grew so much in Cataclysm, and why it continues to grow. That extra health allows them to increase damage done by monsters and attacks in raids without necessarily killing players faster (that's assuming you're at an appropriate level of gear for the content you're in.) Stronger heals let you compensate for the extra damage, while the extra health means the healers don't necessarily have to spam cast just to keep you alive. If it sounds like healing/damage/health are all scaling in a way that creates a sort of balance.... well, that's the entire point of increased item levels for higher raid content.

Striving for balance and coming up with ideas are good things, but this particular idea just wouldn't do much to achieve balance on its own. A lot of other changes would need to happen for it to be even slightly feasible (honestly, I think the only way that giving everyone the same health total could achieve balance is if ilvl were removed entirely, and your power was solely based on level/spec/talents.... a system I personally like, but not one that I think is appropriate for WoW.)

Edit: TyloBedo beat me to the punch, probably because he typed sentences and I typed half a book :-P.

Too much work. They'd basically need to scale WHOLE game, every single content piece from level 1 all the way up to 90.
And what is wrong with big numbers and steamrolling old content? Old content is old, let me solo sunwell for xmog instead of gathering 20+ people again, for 5 year old content nobody gives a flying fuck about.

Only examples of scaling getting out of hand are those ridiculous 409 items - plate class can reach 380+ item level now, essentially decking himself in those 409 blues at level 80. It's so ridiculous that armor type doesn't even matter, wearing cloth leather mail and plate at once? Why not, power gained greatly outshines the puny bonus from armor class specialization. This is what should be kept at bay, scaling like that ruins non-max level PvP and makes ridiculous situations where level 80 char does better DPS than level 90 one.